Rupee opens at a three-week high

US inflation slipped to a more than two-year low. US CPI declined to 3 percent on a yearly basis in June from 4 percent in May. Further, the core CPI dropped to 4.8 percent from 5.3 percent.

Meanwhile, India's headline retail inflation rate snapped its four-month falling streak and rose to 4.81 percent in June from 4.31 percent in May, pushed by a rise in vegetable prices, fading away from the favourable base effect.

Traders pared their bets for a hike in November to about a 26 percent chance from 46 percent prior to the CPI release, according to data compiled by Bloomberg.

Traders are awaiting US Producer Price Index (PPI) for June and weekly jobless claims. Other significant economic indicators to be released today include UK GDP for May and Euro-zone industrial production for May.

Among Asian currencies, South Korean won gained 1.03 percent, Malaysian ringgit up 0.78 percent, Philippines peso climbed 0.68 percent, Indonesian rupiah rose 0.65 percent, Taiwan dollar 0.38 percent, Thai Baht 0.14 percent, Hong Kong dollar and Singapore dollar were up 0.05 percent.

The dollar index, which measures the US currency’s strength against major currencies, was trading at 100.44, down 0.1 percent from its previous close of 100.52.